new trading dimensions - how to profit from chaos in stocks, bonds, and commodities - bill williams

[...]... Figure 2-1 How do you handle new information (Chaos) ? Therein lies the difference between a successful approach to trading and the more common losing approach Traders who let the new incoming information organize their trading will be in sync with the market and thereby will be winners Attempting to fit new incoming information (Chaos) into old categories distorts both the information and the trading The... Attractor is a black-white, Figure 2-4 The Point Attractor good-bad, single-minded attractor, except at the saddle point This is the first-dimension attractor, and it can be used to trade the markets The exact techniques for trading the stock and commodity markets are examined and explained in later chapters THE CYCLE (CIRCLE) ATTRACTOR The characteristic of the Cycle Attractor (Figure 2-5 ) is a back -and- forth... the map being drawn by the data Most scientists and traders are trained in linear thinking and tend to explain all behavior in Newtonian terms, but Chaos has revealed that nonlinear thinking draws a more accurate map of puzzling situations These scientists have found that "educated intuition" becomes an important factor in solving problems and can be of great benefit in extracting profits from the markets... by trial and error with feedback, by learning from your mistakes, and always by beginning anew from Awareness Letting Chaos organize your life and trading will allow you to TRANCE-END to the next higher level In the land of Chaos, you get better by letting go, not by strenuously climbing hills If this new action is rewarding—if it leads to greater order and coherence (cosmos)—then continue to follow... ourselves, and to progress toward realizing our own personal potential We are forced to make choices, to abide by the results, and to learn from daily opportunities Risk is a turn-on in life We are not interested in haphazard risk We are talking about the risk that produces research, allowing us to understand the markets better and to extract profits from our knowledge and understanding TRADING OUR BELIEF... moving The Alligator is a personification of this process and influences every signal in my trading group's arsenal We will demonstrate both the setup and how to use this valuable tool while trading In this chapter, we will describe the Alligator, what it does, how to construct it, and how to trade it TRADERS' BI6GEST PROBLEM Trading is likely the most exciting way to make a living and/ or accumulate... he starts to close his mouth and loses interest in eating (Eating here is signified by an open mouth; sleeping, by a closed or intertwining mouth.) This is the time you want to start taking profits from the trend move Then you simply sit back, let the Alligator take a nap, and get back into this market when the Alligator starts to awaken Figure 3-6 is a Coca-Cola stock chart During August and early... because you are attempting to fit new information into old categories (Aha! What are you doing with this information at this moment?) Think about that when you are in the market and feeling either bored or overwhelmed Our first impulse when handling new incoming information is to organize it in some way You are in the process of organizing this material that you are reading Once anything, material or otherwise,... mathematical exercise, and instead condensed our 16+ years of intensive study and application of Chaos principles and techniques in investing and trading in the markets In the following chapters, we will go through each of the five dimensions we use to analyze the markets, looking for entry and exit strategies based on nonlinear dynamics and fractal geometry In the next chapter, we will explore how we use the... Attractors Only in this way can we live and trade autonomously in the moment, in tune with what the Chinese call the Tao—the Way, the flow of forces in the fourth dimension THE POINT ATTRACTOR The Point Attractor (Figure 2-4 ) is the simplest way to bring order out of Chaos It lives in the first dimension of the line, which is made up of an infinite number of points Whenever this point attractor is . purposes in this chapter are: to introduce you to the basic concepts of Chaos in a relatively nonscientific manner, and to point out its applicability to profitable trading and investing. When. while thinking about how we are dancing. We can't trade well when we're planning what we are going to do (trade) tomorrow. Living in the now is a necessity to good trading. Living in the. risk was in seeing our enemies, looking them in the eye, and doing something about them. Then the atomic bomb made hand- to- hand combat obsolete. We no longer looked our enemies in the eye, and war